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January 05, 2006

Work for less

Q #1: Why do companies in the West send their decrepit ships to Alang to be broken up?

A #1: Because Indian shipbreakers work for far lower wages than Western ones.

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Q #2: Why do companies in the West send their software development and call centre work to India?

A #2: Because Indian software developers and Indian call centre workers work for far lower wages than Western ones.

So ... here's what I'm wondering. Is there cause for concern in one, or both, or neither, of these situations? Are they comparable? Why or why not?

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Postscript: Glad to read the comments this has attracted. One more thought: yesterday, I read somewhere that Bangalore has the largest call centre concentration in the world; and an American friend told a small and appreciative audience that India is commonly seen as the next power in IT and related services.

Alang happens to be Asia's biggest shipbreaking yard. At its peak, about 60,000 Indians worked here. In the 25 or so years since the first ship was torn apart in Alang, has India ever been acclaimed as the next power in shipbreaking? If my American friend had said that to the audience yesterday, would they have been as appreciative?

9 comments:

I don't think the two are the same. In the first case the "outsourcing" is capable of causing a lot of environmental problems and is also a health hazard. In the second scenario the "outsourcing" provides respectable jobs and lives to a lot of people who would otherwise be unemployed.I know there is a lot of noise being made about the call centre jobs being not "hip" and such people are looked down upon. But I think it is a lot better than being unemployed. What say you?

Its curious but that was the exact same thing I thought when I read your first post about Alang- why would the French send over their ship to be broken here, apart from environmental concerns (I'm sure they care two hoots whether it is Tahiti or India)

And it was the exact same conclusion, of course. This kind of outsourcing the entire world can do without.

As long as the costs are lower in India there will be a "potential difference" which will facilitate movement of outsourcing jobs to India. If Indian costs rise (and these costs have been rising in the software and BPO industries) in the long term the work may move elsewhere where it is cheaper. It happened in garments. It happened in leather. It may happen with BPO if Pakistan, Sri Lanka, Bangladesh, and half of Africa and the rest of the world which speaks English, get their act together. That is market dynamics. I don't think there is cause for concern here as long as we understand that service sector jobs catering to only the external market, and predicated on mere price advantage, are likely to prove to be ephemeral in the long run.

Should we be concerned that dirty, dangerous, polluting jobs are coming to India. Sure. Because the bigger fact this illustrates is the lax implementation of laws in our hazardous industries. Dirty, hazardous jobs are not just coming in from outside. There is a vast number of such jobs in the local economy itself. The sweatshops, the metal foundries, cracker manufacturing units, plastic based small industry, small scale drug units, electroplating, battery recycling, quarrying .. the list is endless.

As usual, enforcing relevant existing laws without fear or favour would be a good and logical first step in ensuring a better level of safety for individuals and for the environment. If the law of the land bans dangerous substances from being brought into the country, or demands that safeguards be provided for workers in hazardous industries, enforce the laws in all cases, for God's sake.

The cynics say that there is no will to establish the rule of law in this country. That corruption ensures that few get punished for breaking the law. I agree. But that is no excuse for trying to make things better. Else we will, inexcusably and ruthlessly, continue to expose our land and people to avoidable danger.

The shipbreaking activity is legal in India. The pollution levels created are acceptable in India. Hence, do you worry about the people who send the ships or do you worry about the people who wrote the environmental laws (and monitor it)? After 9/11, most of the scrap metal was bought by a south indian scrap dealer, some sectors of North India deals with handling plastic waste from across the world. New businesses? or Worrisome signs?

There has been a continous shift from farm based labour to urban labour. Do you worry about that? If so, what would you say to a man who earns more thanks to his job in the Alang, than his farm job in his native village. Worry or not to worry?

Today, immaterial of their basic degrees, students are attracted to IT related jobs. Other industries (especially manufacturing based) are already suffering from lack of a talent pool. But when compared to 10 years ago when holding a graduates degree meant nothing to today when a graduate is easily absorbed in a job, does one worry about talent polarisation or does one feel happy about job creation in the IT industry?

The IT industry was about cheaper resources 5 years ago. Now it's 'solution based software development', a real change? or mere change in nomenclature?

Goyal, the point I tried to make in my pieces about Alang is that the men who work there see that job -- health and pollution hazard included -- as "a lot better than being unemployed". A lot better, too, than their prospects in their home villages. For them, Alang is a respectable job.

So where does that leave us? (R, I think this is partly your point too).

Pankaj, I couldn't agree more about the lax implementation of laws (this is my problem with the Enron deal too). Thanks for that angle.

And I also think, like you, (and perhaps this answers WiseD) that with BPOs we are in a window of opportunity right now: if and when other English speaking countries can do the stuff cheaper, that window will close. Nothing wrong with that.

Dilip, I think there are no profound issues to be contemplated in either situation - the workers at Alang will be breaking ships and call-center employees answering calls until it is profitable to do so.

That breaking ships is profitable in India is because India is poor. The activity will stop when it is no longer affordable and as someone earlier pointed out, it may move to Africa - still no big deal ... someone has to do it.

could not find the link for the article quoted below .. came to me in a mail

---------------------Before I started working for myself, I spent some years in some of the top IT companies in India and still have many friends working in various software companies < http://www.indicthreads.com/ > . I wrote a blog Recruiting like crazy < http://indicthreads.com/blogs/6605/india_recruiting_like_crazy.html > , about the same time last year about how Indian companies are recruiting like there's no tomorrow and the possible consequences. However I was avoiding writing this particular piece as it seems like an unpatriotic thing to do, to tell the world how bad the working conditions in software companies in India have become. And there's always the risk of excerpts being used out of context to bash up IT in India.

I am now writing this because I just keep hearing horror tales from the industry and it doesn't seem like anything is being done in the matter, so I thought I will do my bit and write.

First and foremost, before stereotypes about India kick in, I would like to clarify that I am not saying that Indian software companies are sweat shops where employees aren't being paid and made to work in cramped uncomfortable places. The pay in software companies is very good as compared to other industries in India and the work places are generally well furnished and plush offices < http://www.indicthreads.com/ > . India being a strong democracy, freedom of expression is alive and well and Indians are free to express their opinions and voice their concerns. Yet, I say that the software industry is exploiting its employees.

IT work culture in India is totally messed up and has now started harming the work culture of the nation as a whole. Working 12+ hours a day and 6 or even 7 days a week is more the rule than the exception.

Consequences:

*A majority of IT people suffer from health problems.As most of the IT workforce is still very young, the problem isn't very obvious today but it will hit with unbearable ferocity when these youngsters get to their 40s.

*Stress levels are unbelievable high. Stress management is a cover topic in magazines and newspapers and workshops on the subject are regularly overbooked.

*Most IT people have hardly any social / family life to talk of.

*As IT folk are rich by Indian standards, they try to buy their way out of their troubles and have incurred huge debts by buying expensive houses, gizmos and fancy cars.

Plush offices, fat salaries and latest gizmos can give you happiness only if you have a life in the first place.

The reason I feel this culture has emerged, is the servile attitude of the companies. Here's a tip for any company in the west planning to outsource to India. If you feel that a project can be completed in 6 weeks by 4 people, always demand that it be completed in 2 weeks by 3 people.

Guess what, most Indian companies will agree. The project will then be hyped up as an "extremely critical" one and the 3 unfortunate souls allocated to it will get very close to meeting the almighty by the time they deliver the project in 2 weeks. Surprisingly, they will deliver in 2-3 weeks, get bashed up for any delays and the company will soon boast about how they deliver good quality in reasonable time and cost. Has anyone in India ever worked on a project that wasn't "extremely critical"?

I was once at a session where a top boss of one of India's biggest IT firms was asked a question about what was so special about their company and his answer was that we are the "Yes" people with the "We Can Do It " attitude.It is all very well for the top boss to say "We Can Do It ".. what about the project teams who wish to say "Please....We Can't Do It " to the unreasonable timelines...I was tempted to ask "What death benefits does your company offer to the teams that get killed in the process?". I sure was ashamed to see that a fellow Indian was openly boasting about the fact that he and his company had no backbone. The art of saying No or negotiating reasonable time frames for the team is very conspicuous by its absence. Outsourcing customers more often than not simply walk all over Indian software companies. The outsourcer surely cannot be blamed as it is right for him to demand good quality in the least cost and time.

Exhaustion = Zero Innovation

* How many Indians in India are thought leaders in their software segment?- Very few

* How much software innovation happens in India? - Minimal

*Considering that thousands of Indians in India use Open Source software, how many actually contribute? - Very few

Surprisingly, put the same Indian in a company "in" the US and he suddenly becomes innovative and a thought leader in his field. The reason is simple, the only thing an exhausted body and mind can do well, is sleep. zzzzzz

I can pretty much bet on it that we will never see innovation from any of10000+ person code factories in India.

If you are someone sitting in the US, UK... and wondering why the employees can't stand up, that's the most interesting part of the story. Read on...

The Problem

The software professional Indian is today making more money in a month than what his parents might have made in an year. Very often a 21 year old newbie software developer makes more money than his/her55 year old father working in an old world business < http://www.indicthreads.com/ > . Most of these youngsters are well aware of this gap and so work under an impression that they are being paid an unreasonable amount of money. They naturally equate unreasonable money with unreasonable amount of work.

Another important factor is this whole bubble that an IT person lives in.. An IT professional walks with a halo around his or her head. They are the Cool, Rich Gen Next .. the Intelligentsia of the New World... they travel all over the world, vacation at exotic locations abroad, talk "american", are more familiar of the geography of the USA than that of India and yes of course, they are the hottest things in the Wedding Market!!!

This I feel is the core problem because if employees felt they were being exploited, things would change.

I speak about this to some of my friends and the answer is generally "Hey Harshad, what you say is correct and we sure are suffering, but why do you think we are being paid this much money? It's not for 40 hours but for 80 hours a week. And anyway what choice do we have? It's the same everywhere."

So can we make things change? Is there a way to try and stop an entire generation of educated Indians from ending up with "no life".

Solutions

1) Never complement someone for staying till midnight or working 7 days a week.

Recently, in an awards ceremony at a software company, the manager handing over the "employee of the month" award said something like "It's unbelievable how hard he works. When I come to office early, I see him working, when I leave office late, I still see him working".. These sort of comments can kill the morale of every employee trying to do good work in an 8hr day.

Companies need to stop hiding behind the excuse that the time difference between India and the west is the reason why people need to stay in office for 14 hours a day. Staying late should be a negative thing that should work against an employee in his appraisals. Never complement someone for staying till midnight or working 7 days a week .

2) Estimates:

If time estimates go wrong, the company should be willing to take a hit and not force the employee to work crazy hours to bail projects out of trouble. This will ensure that the estimates made for the next project are more real and not just what the customer has asked for.

3) Employee organizations / forums

NASSCOM (National Association for Software and ServicesCompanies) < http://www.nasscom.org/ > and CSI (Computer Society OfIndia) < http://www.csi-india.org > are perhaps the only two well known software associations in India and both I feel have failed the software employee. I do not recall any action from these organizations to try and improve the working conditions of software employees. This has to change.

I am not in favor of forming trade unions for software people, as trade unions in India have traditionally been more effective at ruining businesses and making employees inefficient than getting employees their rights and helping business do well. So existing bodies like NASSCOM should create and popularize employee welfare cells at a state / regional level and these cells should work only for employee welfare and not be puppets in the hands of the companies.

If the industry does not itself create proper forums for employee welfare, it's likely that the government / trade unions will interfere and mess up India's sunshine industry.

4) Narayan Murthys please stand up

Top bosses of companies like Infosys, TCS, Wipro, etc.need to send the message loud and clear to their company and to other companies listening at national IT events that employee welfare is really their top concern and having good working culture and conditions is a priority. Employee welfare here does not mean giving the employee the salary he/she dreams of.

Last word

I am sure some of my thoughts come from the fact that I too worked in such an environment for a few years and perhaps I haven't got over the frustrations I experienced back then. So think about my views with a pinch of salt but do think about it. And if you have an opinion on this issue, don't forget to add a comment to this article